Given that the debate about rearming Europe and standing by Ukraine isn’t set to go away anytime soon, there is one key question that everyone is studiously avoiding:
Who is going to pay for it?
As you read this, the finance departments of every European government are nervously poring over their balance sheets.
French observers are already tensing up over a potential cut to France’s massive welfare state. Incoming chancellor of Germany Friedrich Merz’s trillion euro gambit is subject to a high-stakes game of chicken with the Green Party.
On a wider European level, member states are also actively discussing the €200 billion elephant in the room: seized Russian assets.
Though fiscal hawks in Europe’s complicated banking hierarchy continue to urge against it, policymakers are seriously considering the drastic move to fund Ukraine’s military needs and give the country a stronger hand in negotiating an end to the war.
As things stand, European governments cannot make up for the US’ decision to shortchange its allies and cut off Ukraine at a critical juncture.
Too many member states’ economies are groaning under their own weight, and a looming trade war with the US is just another massive spanner in the works.
At a time when it has never been clearer that moderate European politics will no longer suffice, it’s time for the EU’s policymakers to think bigger.
Specifically, “the biggest.”
In the simplest, most unequivocal terms, Europe’s only feasible option is to tax the ultra-wealthy like it’s never taxed them before. French economy minister Eric Lombard phrased the idea diplomatically, referring to such individuals as “those with substantial savings.”
The fact is that we witnessed the biggest upward wealth transfer in human history in the last few years. As far as our history books can show us, there has never been any other point in time in which humanity amassed as much measurable wealth as it has today.
The vast majority of that wealth is concentrated into the hands of 2769 billionaires, according to the latest Oxfam International report.
“Billionaire wealth grew by $2 trillion in 2024 alone, equivalent to roughly $5.7 billion a day, at a rate three times faster than the year before. An average of nearly four new billionaires were minted every week. Meanwhile, the number of people living in poverty has barely changed since 1990, according to World Bank data,” the report notes.
“This is the second largest annual increase in billionaire wealth since records began. The wealth of the world’s ten richest men grew on average by almost $100 million a day — even if they lost 99 percent of their wealth overnight, they would remain billionaires,” the report adds drily.
Remember those numbers the next time some bootlicker on the internet tells you that billionaires deserve their wealth. Point out that nobody ever deserves or even needs to accumulate that much wealth. Ask them how they manage to speak when their tongue is so busy going at it with their favourite billionaire’s soles if they keep insisting.
The Oxfam report lays out it clearly. The EU Tax Observatory’s report for 2024 even provides a blueprint for the way forward.
Besides pushing for a global 25% corporate taxation rate, the observatory advocates for the removal of loopholes that enable tax warfare between countries, and the introduction of a new global minimum tax for billionaires that amounts to 2% of their total wealth.
The observatory’s rough estimates for that last proposal alone indicate that taxing those 2769 billionaires at just 2% could raise $250 billion annually. To put that number into context, the US’ Department of Defence estimates it spent a total of $180 billion on military aid for Ukraine (before its abrupt U-turn following Trump’s ascent to the White House).
With so much wealth just sitting there, the mere notion that average citizens must shoulder the rearmament burden should be offensively ridiculous to anyone who understands just how wide the gap between the ultra-wealthy and everyone else is.
Besides railing against welfare states, the European far right – emboldened by desperate industrialist lobbies – has made an art form out of appropriating consumer anger about soaring commodity prices and using it as pretext for the watering down of climate legislation.
The real target shouldn’t be the welfare state. Nor should it be the EU’s climate legislation. The real target are the ultra-wealthy.
After all, who benefited most from decades of laissez-faire policies that allowed business to boom unperturbed by the environmental and social impact of their activity? The ultra-wealthy.
Who benefited most from unified markets and lavish state subsidies meant to prop up national champions? The ultra-wealthy.
Who benefited most from common funding pools, redevelopment and modernisation grants, and relatively unimpeded access to lawmakers? The ultra-wealthy.
In truth, Europe’s laggardly economy and lack of cutting edge research operations is largely due to its lawmakers’ failure to heed early warnings about the continent’s dependence on other major superpowers for key resources.
Europe’s failure to decisively take the lead with the industries of tomorrow means members states are now forced to consider either curbing essential national welfare services or otherwise engaging in revolutionary policy-making.
Taxing the ultra-wealthy to service the continent’s needs may just be the elusive silver bullet that Europe needs to tip the geopolitical scales in its favour.
Most importantly, it would tip the scales in favour of the overwhelming majority of Europeans who are tired of working more and earning less while billionaires continue hoarding valuable resources for their own amusement.
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Featured photo by Evgeny Opanasenko on Unsplash